The Unpopularity of Distributed Ledger Technology for DTCC’s TIW Reprint

03/11/2023 16:06 • Tech Ticker • 123 views

On March 11, the reprint of the Transaction Information Warehouse (TIW) project of the American Depository Trust and Clearing Corporation (DTCC) was launched in October 2022. The service has been delivered on cloud technology and supports distributed ledger technology (DLT) function at the access layer. However, it seems that no customer is interested in connecting through the latter.

The blockchain access function of the US DTCC transaction information database is “no one cares”

Analysis based on this information:

The American Depository Trust and Clearing Corporation (DTCC) launched the reprint of its Transaction Information Warehouse (TIW) project on March 11, which has been upgraded to support cloud technology and distributed ledger technology (DLT) function at the access layer. However, it appears that not a single customer is interested in utilizing the DLT aspect of the service.

The DTCC is a market infrastructure holding company that offers clearing, settlement, and information services to the financial industry. The TIW project is a central repository of information about over-the-counter (OTC) derivative transactions. The project provides market participants with comprehensive trade information required for regulatory compliance, risk management, and asset valuations. The TIW increases transparency, reduces operational risks, and enables participants to meet global regulatory standards.

The upgraded TIW service offers cloud technology, which eliminates the need for participants to have physical infrastructure, such as on-premises servers, to access the platform. The platform also supports DLT function, which offers users greater data privacy, transparency, and rapid transaction settlement.

Despite the benefits of DLT, it seems that none of the TIW’s customers are currently utilizing this feature. There may be some reasons behind the reluctance to use the technology. Firstly, the distributed nature of DLT makes it less interoperable with existing systems that the participants may already be using, creating inefficiencies and additional costs. Secondly, there may be concerns around legacy processes, as DLT may require a systemic overhaul of operations, creating a burden of change for the users.

Moreover, there may be some concerns around scalability and performance of the DLT in a high-intensity environment, such as the TIW. In addition, the lack of standardization and regulation in the DLT domain may create uncertainty for participants in terms of regulatory compliance and legal implications.

In conclusion, although the use of DLT has the potential to enhance transparency, privacy, and settlement speed for the TIW, it seems that customers are hesitant about experimenting with the technology. As DLT becomes more prevalent, the DTCC may need to provide more guidance to its customers and bear some associated costs to encourage adoption.

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